When is Production of a Privileged Document Inadvertent?
By Robert K. Sall
Robert K. Sall, practices with Sall Spencer Callas & Krueger in Laguna Beach and is a member of the LACBA Professional Responsibility and Ethics Committee. His practice focuses on business litigation, legal malpractice litigation and attorney-client fee disputes. The opinions expressed are his own.
Document production in litigation often involves massive numbers of documents, and established California law recognizes that the inadvertent inclusion of privileged documents in that context should not automatically be deemed a waiver of privilege.1 Much has been written about the duty to stop review and notify the privilege holder, as imposed by the trio of California cases, State Compensation Ins. Fund v. WPS, Inc. (State Fund),2 Rico v. Mitsubishi Motors Corp. (Rico),3 and Clark v. Superior Court (Clark).4
When production of an apparently privileged document occurs, it should not be reviewed any more than necessary to ascertain that it appears to be privileged and inadvertently produced, and notice must be given promptly to the privilege holder.5 Less guidance exists, however, for situations where there may have been an inadvertent forwarding of a single e-mail that appears to be privileged. When a lawyer receives an otherwise privileged writing from a third party, must such writing be treated as privileged and inadvertently produced? Who gets to determine whether there has been an implied waiver of privilege when it is unclear whether the act of forwarding was intentional, or merely a mistake in hitting the send button?
Imagine a situation where Lawyer A sends a privileged e-mail to Client A, who then inadvertently forwards it to a Third Party. The forward contains no explanation of Client A's reason for sending the e-mail, leaving it unclear whether the client intended to reveal his lawyer's communication or merely made an inadvertent transmission. Third Party then forwards the e-mail to another and it ultimately lands on the desk of Lawyer B, who is opposing counsel to Lawyer A and adverse to Client A. Because there is no express statement of Client A's intent, the possibility exists there was a waiver, but equally so, the possibility of inadvertence exists. Some would argue that no duties are imposed on Lawyer B under the Rico line of cases because it is not "reasonably apparent" that production of the document was inadvertent, and the e-mail does not clearly appear to be privileged because it is in circulation.6 Must Lawyer B stop reading and give notice to the privilege holder?
For important public policy reasons recognizing both the importance of the attorney-client privilege and a lawyer's professional obligations to adverse parties and counsel, State Fund established the rule that when an attorney receives production of an apparently privileged and inadvertently produced document, review must stop, and notice must be given to the privilege holder. The Supreme Court later endorsed this rule as "a fair and reasonable approach" in Rico.7 Other elements of the Rico test for the duty to stop and notify would appear to include that the lawyer: 1) "receive materials" that 2) "obviously appear" 3) "to be subject to an attorney client privilege" or 4) "otherwise clearly appear to be confidential and privileged", and 5) it is "reasonably apparent that the materials were provided or made available through inadvertence."8 Another express holding of State Fund, however, does not mandate that the document must "obviously appear" to be privileged, but only that it "may" be privileged: "We do, however, hold that whenever a lawyer ascertains that he or she may have privileged attorney-client material that was inadvertently provided by another, that lawyer must notify the party entitled to the privilege of that fact."9 (Emphasis added.)
How is this standard to be applied when the document in question comes into a lawyer's hands from a third party, suggesting there may have been a waiver, but there is no clear indication either of inadvertence or the privilege holder's intent to circulate the document? In a 2013 ethics opinion, the State Bar of California's Standing Committee on Professional Responsibility and Conduct opined that when a third party sends a privileged document to another attorney and it is reasonably apparent that the document is sent by the third party without the owner's authorization, the delivery is deemed inadvertent and the ethical duties of State Fund and Rico will apply.10
When a writing is one between attorney and client sent during the course of that relationship, the writing is presumed to be privileged, and the burden of proof will be on the opponent of the claim of privilege to establish otherwise.11 In such circumstances, the attorney-client privilege is presumed to attach the entire writing irrespective of its content.12 Thus, until it may be proven otherwise by the opponent of the privilege, the document is presumed privileged and therefore obviously appears to be privileged. Where coming to the lawyer from a third party with no clear expression of the privilege holder's consent, the receipt of the document is inadvertent and the Rico disclosure obligation should apply.
The Rico line of cases imposes a self-policing process for a lawyer to recognize and ascertain when the document may still be privileged. Circumstantial evidence that may support a waiver does not mean there has been a waiver, and one should not be assumed. Rico requires that the privilege holder be given notice so that he or she has the opportunity to claim privilege and inadvertence. The possibility of waiver and inadvertent production exists in virtually every case where adverse counsel possesses what would otherwise appear to be a privileged document. Such a document was either intentionally produced or forwarded by the privilege holder, constituting waiver, or obtained by inadvertence of the privilege holder. The act of someone else being in possession of and circulating the document without the privilege holder's authorization does not in itself establish waiver. In the absence of an express waiver on the face of the document or communicated to the receiving attorney, the receiving attorney must assume that the document is still privileged, its production inadvertent, and notice should be given to the privilege holder. Only then can the parties know whether a waiver was intended and, as Rico requires, resolve the matter by agreement or by seeking guidance from the court.
1 Rico v. Mitsubishi Motors Corp., 42 Cal. 4th 807, 817-18 (2007).
2 State Comp. Ins. Fund v. WPS, Inc., 70 Cal. App. 4th 644 (1999).
3 Rico v. Mitsubishi Motors Corp., 42 Cal. 4th 807 (2007).
4 Clark v. Superior Ct., 196 Cal. App. 4th 37 (2011).
5 Id. See also, State Comp. Ins. Fund v. WPS, Inc., 70 Cal. App. 4th 644 (1999).
6 Facts similar to these were recently argued in a pending writ of mandate proceeding in the Fourth District Court of Appeal, McDermott, Will & Emery v. Superior Ct., Case No. G053623.
7 Rico, at 817-818.
9 State Fund, supra, 70 Cal. App. 4th 644 at 657.
10 State Bar Formal Op. 2013-188, at 4.
11 Evid. Code §917.
12 Costco Wholesale Corp. v. Superior Ct., 47 Cal. 4th 725 730-31(2009).